General Ledger Correction Rows

Overview

Maintaining accurate inventory valuation is critical for operational and financial reporting. Historically, Finale Inventory users have occasionally omitted critical costing or pricing data when recording transactions. While these situations have been flagged with warnings, they were often not corrected, resulting in ledger entries that undervalued transactions and disrupted average cost calculations.

The new General Ledger Correction Rows feature addresses this issue by applying refined logic to infer values in place of missing data. This enhancement ensures more accurate general ledger entries and inventory valuation.

These new correction rows are a correction Journal entry to Finale’s Ledgers only. They do not and have not changed any historical ledger entries in your account.

When you view your Inventory valuation in Finale with the Correction Rows, they represent the existing historical transactions with a one-time correction journal entry with the new applied logic.

You may go back to historical transactions and provide/correct the missing values and this will cause the correction rows to be changed or removed entirely.

If your account has no missing data you will not have any correction rows.

Background: Previous vs. New Behavior

Historically, Finale treated missing data as if the value were zero. This led to inaccurate financial records, especially when costs were not supplied for purchases or builds. The new correction logic improves this by inferring a value based on available data, where applicable, and generating correction ledger entries to align past and future records.

The new logic takes effect starting March 31, 2025. Ledger entries before this date will retain historical behavior. Correction rows summarize the impact of the new logic as applied to historical data.

There will not be any additional correction JEs created in the future for the specific corrections listed below.  One correction entry per type of correction will serve as a correction for all previous historical entries where data was missing.

Types of General Ledger Correction Rows

1. Missing Purchase Price Correction

Previous behavior:
When a purchase shipment had no unit price specified, Finale treated the value as zero—even if there was an existing average cost for the item. The shipment was valued at zero in the ledger, and the average cost remained unchanged.

New behavior:
If an average cost exists for the item, the system now uses this average cost as the unit price for the shipment. A general ledger correction row is generated to reflect the updated valuation for past shipments.

• Applies to: Historical purchase shipments missing a unit price.
  
  
• Ledger impact: A correction row is created to represent the inferred value.
  
  
• Prevention: Users can manually edit purchase orders to supply the missing price, which will remove the corresponding correction row.
  
  

Note: Correction rows affect Finale’s general ledger only. They are not automatically synced to external accounting systems such as QuickBooks Online (QBO). Users should review correction reports and post manual journal entries in their accounting systems if needed.

2. Missing Build Consume Cost Correction

Previous behavior:
If a build consumed components where one or more items had missing cost data, Finale treated those items as having a value of zero, but it did not affect the product’s cost. If at least one consumed component has a known cost, the system uses that cost to infer the value of the build. This caused the finished goods to have an incorrect or incomplete valuation.

New behavior:
The system distinguishes between a cost of zero and missing cost data. If at least one consumed component has a known cost, the system uses that cost to infer the value of the build. Finale uses the produced product's average cost if it exists for the valuation when no costs are present for ALL of the items in the BOM. Correction rows are created for each component with inferred values.

• Applies to: Builds consuming components with missing cost data.
  
  
• Ledger impact: Correction rows reflect inferred values for the build components.
  
  
• Prevention: Users can update past transactions to include missing component costs to avoid corrections.
  
  

3. Missing Build Valuation Correction

Previous behavior:
When finished goods were on hand but lacked a defined average cost, and a new build later established a valid cost, Finale did not update the valuation of the existing finished goods.

New behavior:
If a new build establishes an average cost for a finished good, the system applies this cost retroactively to the existing quantity on hand that previously had no valuation. A correction row is generated to account for the value of the existing stock.

• Applies to: Existing finished goods with quantity on hand but no average cost.
  
  
• Ledger impact: Correction rows add value to inventory using the newly established cost.
  
  
• Prevention: Users can supply cost data for finished goods before creating the first build.
  
  

Reports

Two new reports are available to assist users in reviewing correction activity:

• Historical correction report:
  High-level summary of total corrections per item or category.
  
  
• Historical correction report w/detail:
  Detailed view of each correction row, including transaction ID, item, date, logic used for inference, and corrected value.
  
  

Impact on External Accounting Systems

Correction rows do not sync to QBO or other integrated accounting systems. They only affect Finale’s internal ledger. To reconcile discrepancies:

1. Run the correction report in Finale.
   
   
2. Post manual journal entries in your accounting system if desired
   
   

Filtering Correction Rows

Users who prefer not to view correction rows in reports or exports can apply filters in the general ledger views to exclude them.

To apply a filter to the General Ledger view or report, use the filter called “Row type” and set it to “Transactions”.   This will remove the Correction rows from the view or report.

Removing Correction Rows

Users who prefer not to have correction rows at all may elect to fix all historical transactions for missing data.  If you correct each and every historical transaction that is missing data there will be no correction rows created. Note: To correct some situations causing the correction rows you may have to create backdated stock changes or backdated average cost change transactions for the product IDs involved. Depending on the number of historical transactions involved this could be very time-consuming.

Important for QuickBooks Online integration users: Remember, none of these correction rows will be synced to your QBO. Removing them from Finale Inventory is not required to prevent any changes to your QBO.  You can elect to make a manual JE adjustment to your QBO with guidance from your accountant or CPA.: If you make backdated changes to your historical transactions these may be synced into your QuickBooks Online account if you are using that integration. The sync filter date will determine if your change is synced.  Remember that your accountant or bookkeeper may have closed your company’s books for previous accounting periods and making adjustments back in time will not be allowed. Consult your accountant or CPA for instructions on how to handle a difference in valuation if you wish to account for the new correction rows or historically corrected data.